KEY POINTS:
PPCS is only halfway through its restructuring process after having cut more than 600 jobs in the past week, the company says.
The meat processor yesterday announced plans to close a plant in Dunedin.
The Burnside plant employs 138 people with venison processing, cold-storage facilities, deer-skin and cattle-hide tannery, and a lamb-skin pelt house.
The proposed closure is the latest in a shake-up which last week saw the Dunedin-based co-operative propose closing its Oringi sheep- and lamb-processing facility in the North Island, with the loss of 466 jobs.
Chief executive Keith Cooper said the restructuring process was about half completed and the company aimed to be largely finished by the end of August.
The farmer co-operative posted a net loss for the year ending August last year of $40.3 million but posted a profit in the first half of this financial year and cut its debt by $63 million.
"We had a poor result last year, we're taking aggressive, immediate action to restore the profitability of this business to underwrite future farmer returns," Cooper said.
In November the company confirmed the closure of a venison processing plant at Te Kauwhata and the Balclutha-based Windward lambskin-manufacturing operations.
The restructuring was about re-configuring capacities and did not have to involve closures per se but could include using fewer shifts, Cooper said. National deer numbers were forecast to fall to about 500,000 next year, down from 736,000 in 2006, while sheep and lamb numbers were expected to be down by two million in the South Island next year.
"Based on our forecasts on, in particular, sheep-meat supply, we see the lamb supply in the South Island continuing on a modest trend down after the '09 calendar year season."
Cooper said the restructuring at PPCS had long-term aims. "We're not positioning our business in terms of processing capacity to account for next year, we have a longer-range outlook."
The forecast fall in lamb and deer numbers seriously affected the viability of venison and skin processing at Burnside, he said.
"Tightening New Zealand and European food-safety regulations make continued operation of export meat-processing facilities at Burnside increasingly problematic as all areas on site, even those not used for food processing, must be maintained to specified standards," he said.
"In addition, the modern blast freezers used for venison processing at Burnside require a large section of a now obsolete conventional cold-storage facility to be frozen down, which incurs significant ongoing electricity costs."
PPCS would, where possible, offer employees at Burnside alternative employment at other facilities.
"We fully accept it creates a period of uncertainty for our employees which [is] not what we want but unfortunately it's a process we need to go through." The redundancy would cost a few million dollars, which would be recovered within a few months based on the saving on the site. If the closure of Burnside was confirmed PPCS would look to sell the site.
Council of Trade Unions secretary Carol Beaumont said workers would need all possible help to find work.
PPCS has scheduled a meeting for next Tuesday to confirm the plans for the Oringi and Burnside plants.
